Question

How do small and micro businesses manage capital to start their business? (May be multiple answers)

a). Finance through IPO

b). Finance through equity funds

c). Finance through banks

d). Finance through friends and family

Answer 1

Small businesses often finance their start-up costs through personal savings, borrowing money or receiving investments from angel investors.

Step-by-step explanation:

For many small businesses, the original source of money is the business owner. Someone who decides to start a restaurant or a gas station, for instance, might cover the startup costs by dipping into their own bank account, or by borrowing money (perhaps using a home as collateral). Alternatively, many cities have a network of well-to-do individuals, known as “angel investors,” who will put their own money into small new companies at an early development stage, in exchange for owning some portion of the firm.